Timothy Geithner and Ben Bernanke told lawmakers on Tuesday that the Lehman bankrupcty is the best example of the need for the Obama administration's proposed financial regulatory reforms. Former CEO Dick Fuld defended the bank, claiming it was hit by a "perfect storm."
Forget corporate bailouts for a second. How the government will regulate the people who help you manage your money will have a bigger impact on you than any other financial reform before Congress. At stake are the fees advisers charge and whether they must act in your best interest.
In the wake of the mortgage loan mess and financial crisis, Congress was hot to regulate this business. But the federal-level effort has lost steam, partly because lawmakers seem to have come around to the industry's point of view rather than the consumer's.
Citigroup's CEO told the TARP oversight panel that "Citi is now a smaller institution that is focused on being a bank." He also called for greater consumer protections at the federal level. And Pandit stressed that Citi is solvent and won't need more TARP funds.
Some of Wall Street's iconic elders are pushing Washington to reregulate Wall Street with a new version the Glass-Steagall Act -- but the next generation is resisting.
